Northern Ag Network Note: The Montana Farm Bureau and Montana Grain Growers will be hosting a farm bill seminar on Tuesday, March 4 near Hobson. If you can make it, it'll be a great opportunity to learn more about the new legislation. CLICK HERE for more details.
by Chris Clayton, DTN Ag Policy Editor
SAN ANTONIO (DTN) — Farmers won't sign up for new farm programs until their 2014 spring crops are in the bin next fall, Agriculture Secretary Tom Vilsack said Friday.In weighing the enrollment options for the new commodity programs, USDA decided sign up would begin with fall-planted crops such as wheat, Vilsack told reporters at Commodity Classic.
Vilsack said USDA has to operate the new commodity programs and roll them out in a thoughtful, constructive manner. He said he wants to ensure farmers understand the choices they have to make, the rules involved and impact of those choices as they relate to buying crop insurance.
Under the timeline laid out by the secretary, producers who grow crops such as winter wheat would first be given the option of signing up for the new crop insurance program, the Supplemental Coverage Option (SCO), next fall. Then, before the November acreage reporting date, those farmers could opt out of SCO without paying the premium if they choose to enroll their wheat acres in the Agriculture Risk Coverage (ARC) program.
“It's the best we can do, given the time the bill passed and the steps that have to be taken,” Vilsack said.
The decision is critical for producers because enrolling a commodity in ARC or the new target-price program, Price Loss Coverage, is irrevocable for the life of the new farm bill.
Price Loss Coverage provides higher target prices than the old counter-cyclical program, but the average price must fall below the target price for the commodity for the full marketing year. Producers who enroll commodities in PLC also get the opportunity to sign up for SCO, which is not allowed for commodities enrolled in ARC because SCO and ARC have comparable payment provisions.
Agriculture Risk Coverage is a revenue-protection program that will provide up to 10{75f28365482020b1dc6796c337e8ca3e58b9dd590dc88a265b514ff5f3f56c30} of a guaranteed revenue level. ARC also has a county option or individual-farm option. Under county ARC, 85{75f28365482020b1dc6796c337e8ca3e58b9dd590dc88a265b514ff5f3f56c30} of base acres are covered, but payment acres are set at 65{75f28365482020b1dc6796c337e8ca3e58b9dd590dc88a265b514ff5f3f56c30} for the individual coverage. Moreover, if a farmer chooses the individual option, all of the farm commodities are enrolled in ARC.
By waiting until farmers harvest their 2014 spring crops, they will have the opportunity to know their production and yields before they have to decide late this year on whether to sign up for ARC or PLC. It could lead to larger-than-expected payments or a program shift by producers who may see significant advantages of choosing one program over the other for 2014 crops. Vilsack said that was not necessarily a concern for USDA in drafting the rules or the enrollment period for the programs.
“From my perspective, we ought not to be managing a program because we are fearful it's going to cost money,” Vilsack said. “We know it's going to cost money. Our responsibility is to make sure people are as educated and as well informed as we can make them, given the time and given their desire to get this up and going.”
Any potential payments under ARC or PLC would not occur until late in 2015 because payments are based on price averages throughout the full marketing year. Commodity payments under the new farm bill are capped at $125,000 per entity, or $250,000 for a married couple in which both are farmers.
Before enrolling in ARC or PLC, farmers will update their production history, yields and have a chance to reallocate base acres.
Given the potential complexity of decisions facing farmers when it comes to ARC, PLC and SCO, the Department of Agriculture also will spend $3 million this year funding land-grant universities to create tools that will educate farmers and land owners about the way programs and crop insurance will interact.
Vilsack also addressed concerns about Farm Service Agency staff, saying the legislation provides $100 million to implement the bill. USDA will use some of those funds to hire staff, but Vilsack noted those would be temporary.
“This is not going to lead to permanent employment for folks,” he said.
FSA will continue to have small offices with one to two staffers. That will still require USDA to redesign the structure of FSA offices as technology is improved. Such plans have caused clashes between USDA and members of Congress in the past. Vilsack argued that restructuring FSA offices and work responsibilities will make FSA more responsive to helping farmers and others tap USDA programs.
“There is still some redesign of those FSA offices that is needed to help them prepare for the future,” he said.
The new conservation compliance rules tying conservation measures to eligibility for crop-insurance premium subsidies won't go into effect until at least 2016, Vilsack said. The framework for that likely will begin sometime later this year.
USDA also will rewrite the rules determining who is an “actively engaged” farmer. Congress opted not to write that into the law, but ordered USDA to create new rules. Vilsack said a new rule will likely be proposed by the end of the year.
More immediately, Vilsack reiterated that livestock disaster signup would occur in April. Also, funds for export promotion programs will be restored in short order.
“We want to continue to promote trade,” he said. “We understand its importance.”
© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
Posted with DTN Permission by Haylie Shipp
